McClain Company incurred the following expenditures during 2019: Apr. 9 The air conditioning system in the...

 

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McClain Company incurred the following expenditures during 2019: Apr. 9 The air conditioning system in the old manufacturing facility was replaced for $87,500. The old air conditioning system had a cost of $70,500 and a book value of $2,700. The old air conditioning system had no scrap value. 29 Annual maintenance of $37,750 was performed. The roof of the old manufacturing facility is replaced at a cost of $64,500. This expenditure substantially extended the life of the facility. A new wing was added to the manufacturing facility at a cost of $272,000. This expenditure substantially increased the productive capacity of the plant, June Sept. 12 Dec. 28 Required: 1. Prepare journal entries to record McClain's expenditures for 2019. 2. Next Level What is the effect on the financial statements if management had improperly accounted for the: a. addition of the new wing to the manufacturing facility b. annual maintenance expenditures DATE Apr.9 Air Conditioning System (New) ACCOUNT TITLE GENERAL JOURNAL Accumulated Depreciation: Air Conditioning System (Old) Air Conditioning System (Old) Gain on Disposal of Property, Plant, and Equipment Jun. 29 Repair and Maintenance Expense Cash Sep.12 Building Cash Dec. 28 Equipment Cash POST. REF. DEBIT 87,500.00 67,800.00 37,750.00 64,500.00 272,000.00 Score: 98/137 CREDIT 70,500.00 84,800.00 37,750.00 64,500.00 272,000.00 McClain Company incurred the following expenditures during 2019: Apr. 9 The air conditioning system in the old manufacturing facility was replaced for $87,500. The old air conditioning system had a cost of $70,500 and a book value of $2,700. The old air conditioning system had no scrap value. 29 Annual maintenance of $37,750 was performed. The roof of the old manufacturing facility is replaced at a cost of $64,500. This expenditure substantially extended the life of the facility. A new wing was added to the manufacturing facility at a cost of $272,000. This expenditure substantially increased the productive capacity of the plant, June Sept. 12 Dec. 28 Required: 1. Prepare journal entries to record McClain's expenditures for 2019. 2. Next Level What is the effect on the financial statements if management had improperly accounted for the: a. addition of the new wing to the manufacturing facility b. annual maintenance expenditures DATE Apr.9 Air Conditioning System (New) ACCOUNT TITLE GENERAL JOURNAL Accumulated Depreciation: Air Conditioning System (Old) Air Conditioning System (Old) Gain on Disposal of Property, Plant, and Equipment Jun. 29 Repair and Maintenance Expense Cash Sep.12 Building Cash Dec. 28 Equipment Cash POST. REF. DEBIT 87,500.00 67,800.00 37,750.00 64,500.00 272,000.00 Score: 98/137 CREDIT 70,500.00 84,800.00 37,750.00 64,500.00 272,000.00

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Date Apr09 Air conditioning system new Mc Clain compa... View the full answer